Cryptocurrency Tide and Islamic Finance Development : any issue?

Cryptocurrencies are hidden monies that are specifically created to be used asdigital currencies while assuming the characteristics of real money. Barringthe divergent opinions on whether permitted in Islamic law (that is/are halal)or forbidden in Islamic law (that is/are haram), and for which the swingtends to be in favor of its blockchain underlying technology permissibility inIslam, cryptocurrencies are undoubtedly indicating the potential for relevance inthe global trade, investment, and other contract settlements in some years tocome. The prospect of blockchain technology is phenomenal with recentestimates suggesting it will be worth more than $20 trillion in just two years,which is more than the entire American economy. Since fortunes are made bythose entrepreneurs and indeed savvy investors who have discerned its futurepotential earlier on, there exists some great temptation for people to jump onthe blockchain bandwagon. Apparently the growing acceptability of digital fiatmoney as a result of technology development on the one hand, and the failure ofthe paper money to mitigate inflation and other economic disequilibria sincethe disappearance of the gold standard on the other, various forms of cryptocurrenciesincluding Bitcoins (referred to as the king) appear to roar towardwider recognition. However, an emerging phenomenon associated with cryptocurrencyrevolution is an observed significant fluctuation (the tide) in itsvalue and thus a subject of discussion within the Islamic finance community and beyond. In the midst of this also is the current agitation founded on some ofthe Islamic law (Sharīʿa) view on the necessity of asset-backed money, to beextended to the current cryptocurrency innovation for its transformation intoa Sharīʿa compliant precious metal-backed currency. The big question nowwhich this chapter sought to provide the answer, what are the implications ofthese developments to a more established and widening global phenomenon ofIslamic finance and its development in the Muslim world vis-á-vis aspirations for sustainedeconomic development. The work finds that cryptocurrencies would generatethree advantages over all forms of money including gold through establishinga unified financial system through its standard decentralization, being rarer thangold and its significant mitigation of inflation. It is also noted that the prevalentforeign exchange risk resulting from the underlying activities (rather thanthe currency itself) is free from speculation (Gharar). It is, therefore, recommendedthat stakeholders in the Islamic Finance world should not be passive butbe proactive in commencing processes to develop technical notes, standards, andoperational guidelines to partake in the inevitable migration to cryptocurrencies